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CMS Can Regulate Arbitration Clauses

Published on May 30th, 2020

A federal court in Arkansas ruled that long-term care facilities must comply with the Centers for Medicare & Medicaid Services’ (CMS) revised final rule regarding pre-dispute arbitration agreements as a condition of receiving Medicare and Medicaid payments.  The rule mandates that an arbitration agreement cannot be a condition for admission to the facility; requires the facility to ensure the resident or his or her representative understands the agreement; and provides the right to rescind an agreement within 30 days.  In the case, Northport Health Services of Arkansas, LLC asserted that the rule exceeded CMS’s authority under Medicare and Medicaid statutes and violated the Federal Arbitration Act.  The court found that the rule is a valid exercise of CMS’ authority and does not conflict with the Federal Arbitration Act.  This ruling is a win for consumer protections.

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